—DRAFT— Revised version to appear in an upcoming issue of Urban Geography SITUATED ELECTRONIC COMMERCE: A VIEW AS COMPLEMENT RATHER THAN SUBSTITUTE FOR OFFLINE COMMERCE

The adoption and use of electronic commerce by many firms was shaped by a number of assumptions about how it adds value to economic exchange. Many of these assumptions have direct relevance for the interaction between e-commerce and geography, in that they emphasized the ability of ecommerce to transcend distance and reach into markets without physical presence. The belief in this ability was based on the immediacy of electronic transmission, the distance-insensitive tariffing applied to packet-switched IP networks, and the presumed efficiency of transaction automation over in-person interaction. It was further broadened by the view promulgated by network economists that electronic commerce is highly subject to network effects that reward rapid growth in the number of users. As a result, many firms entered the online arena without adequate attention to the role of geography in shaping commercial exchange patterns – even those with an existing physical market presence. In this paper, I argue that in many cases it is better for firms to view ecommerce as situated within a particular social and geographic context, enabling services that complement a firm’s physical location, work in concert with other modes of interaction and exchange, and emphasize pre-existing exchange partners. A review of both business-to-consumer and business-to-business electronic commerce research is provided in support of this situated perspective.